Pd/AlxGa1-xAs Schottky contacts and their thermal reactions are studied by capacitance-voltage measurements, current-voltage measurements, and x-ray diffraction. The thickness of AlxGa1-xAs consumed by the Pd/AlxGa1-xAs reaction during annealing was calculated. For annealing temperatures below 300 degrees C the Schottky characteristics of the diodes were good but the electrical junction moves into AlxGa1-xAs after annealing. The amount of junction movement was calculated directly from our measurements. The diffusion coefficients of Pd in AlxGa1-xAs and the activation energy were estimated. The activation energy was found to be larger for higher Al concentration. PdAl, PdAs2, PdGa5, and Pd5Ga2 were detected in the compounds formed by the Pd/AlxGa1-xAs reaction after annealing. (C) 1996 American Institute of Physics.